Associations new law
The Associations Incorporation Act 2015 is anticipated to replace the current Associations Act as of 1 July 2016.
The new law will continue to provide a framework of regulation for not-for-profit organisations such as sport and recreation clubs, societies and community groups in Western Australia leaving the internal management of associations largely to the members. Associations will still be able to incorporate as a separate legal body and thereby limit the liability of its members for lawful activities.
The Department will be offering information and resources about the new law to incorporated association throughout the transitional period.
Keep checking back to this website to access information and material about the new law as they are uploaded.
Important: Please remember the current requirements of the Associations Incorporation Act 1987 continue to apply until the new law commences on 1 July 2016.
Government's Regulatory Impact Assessment Requirements
Key features of the new law
The new law will require associations to update their rules as well as introducing a number of changes regarding:
- financial reporting,
- the rules and
- membership of incorporated associations
The new law will introduce a three–tiered system of financial reporting and accountability requirements based upon the associations revenue.
- Tier 1 associations (revenue of less than $250,000) can elect to prepare basic financial statements with no independent review or audit.
- Tier 2 associations (revenue of $250,000 or more, but less than $1,000,000) must prepare financial reports that give a true and fair view of the financial position of the association in accordance with Australian Accounting Standards. Such reports must be reviewed by a member of a professional accounting body.
- Tier 3 associations (revenue of $1,000,000 or more) must prepare financial reports that give a true and fair view of the financial position of the association in accordance with Australian Accounting Standards. Such reports must be audited by a member of a professional accounting body holding a public practicing certificate.
Associations will still be required to provide their financial reports to members; however the reports will not be required to also be provided to the Commissioner.
The new law will formalise the obligations of committee members, which already exist under other laws. These include:
- duty of care and diligence;
- duty to act in the best interests of the association and for a proper purpose; and
- duty not to misuse their position or information
Eligibility requirements are also set out which prohibit persons from sitting on the management committee where they:
- are an undischarged bankrupt or whose affairs are under insolvency law,
- been convicted with an offence involving fraud or dishonesty punishable on conviction by 3 months or more imprisonment; and
- have been convicted of an offence in connection with the promotion, formation of management of a body corporate, including duties under the new law.
Any person can request the Commissioner's approval to be appointed to the committee.
The new law provides measures to better protect the privacy of association members. Access to the membership register continues to be restricted to association members but now the new law also limits how the information may be used. Further, a member may provide a post office box or email address for contact instead of a residential address.
Importantly all associations will be required to update their rules and either adopt the Model Rules, or adapt their own rules (provided that the rules comply with the new law). Incorporated associations will have three years from 1 July 2016 to ensure that either their rules comply with the new law or to adopt the new model rules.
More information is available on the Key Features of the New Model Rules.
The new law will require each association to include an internal dispute resolution process in its rules. Any unresolved disputes between members of an incorporated association, and incorporated associations and their members can be heard by the State Administrative Tribunal (SAT).
A procedure for the amalgamation of two or more associations into a new incorporated association has been provided under the new law.
The new law modifies the process an association uses for ending their incorporation. Associations can choose either a winding up, which is a formal process using a liquidator, or a cancellation of incorporation, which is a simpler process without the need of a liquidator.
Under the new law each association will be required give the Commissioner details of its address, and also notify the Commissioner of a change of address within 28 days of it occurring.
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Non-incorporated groups, individuals and stakeholders can also be alerted about the new law by subscribing to the AssociationsInfo newsletter.
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